Opportunity for Retailers to Gain Share of the eCommerce Pie
Data Exposes Opportunity for Retailers to Gain Share of the eCommerce Pie as 37% of Customers Acknowledge Amazon is Focused on Increasing Profitability at the Customer’s Expense
KING OF PRUSSIA, Pa., Dec. 14, 2016 /PRNewswire/— New research released today from Radial, the leading omnichannel commerce and technology provider, analyzes attitudes among Amazon shoppers in areas such as shopping frequency, purchasing motivators and trust. The data verifies the urgency for retailers to improve their customer experience before Amazon converts more loyal shoppers and gains more market share. However, when asked “How well does ‘engages in questionable practices’ describe Amazon,” 36% of respondents say very well or pretty well. This directly supports Radial’s analysis that Amazon’s flywheel is under increasing pressure.
“The survey results validate the importance of retailers relying on technology providers to complement the services they can’t offer on their own,” said Stefan Weitz, Chief Strategy Officer at Radial. “The data is an eye-opener for eCommerce retailers, as the more consumers shop on Amazon, the more they trust the company. Even more staggering, the majority of customers say they’ll increase spending with Amazon over the next year. With Amazon commanding the lion’s share of the consumer’s wallet, retailers must address the critical areas most important to customers to ensure their business thrives.”
Customers Remain Open to Amazon
While the most frequent Amazon shoppers cite Amazon as a customer-centric and ethical company, that sentiment decreases as shopping frequency goes down.
- 70% of customers who shop weekly say “puts customers first” describes Amazon very well. That number drops to 35% among monthly shoppers and to 22% among those who shop only a few times a year.
- More than half (58%) of customers who shop at least once a week on Amazon say “very well” describes Amazon as an ethical company, but that dropped to 38% among monthly shoppers and 27% among those who shop on Amazon only a few times a year.
- In the same vein, shoppers are more likely to agree than disagree that Amazon is more loyal to its bottom line than to its customers – 56% agree, or strongly agree.
- Nearly one-third (31%) say Amazon shows the most affordable product only sometimes or not at all.
“The crack we’re seeing in Amazon’s foundation is supported by our survey findings: survival depends on putting the customer experience first,” stated Weitz. “It’s critical for retailers to be transparent with their customers, showcase the most affordable products at all times and deliver on the experience they have promised because shoppers do consider alternatives to Amazon.”
Shoppers will turn to Another Major Retailer after Amazon
- When shoppers decide not to shop Amazon, the primary alternative for more than half (54%) of shoppers is another major retailer. Opting for a physical store follows at 27% and just 10% of customers turn to a brand’s direct website.
- The primary motivator to shop somewhere other than Amazon tends to be price (44%) or when the product is sold out on Amazon (26%).
- Worth noting, about three-in-five (58%) say there are certain products they prefer to purchase directly from a retailer or brand rather than an Amazon-branded product. Home products, tablets and technology accessories ranked highest among what customers chose to purchase directly from a retailer.
“eCommerce is rapidly growing and the pie is getting bigger,” emphasized Weitz. “Now the challenge for retailers is how to position themselves to capture their fair share of that pie and be the go-to source for shoppers when Amazon does them wrong. This means retailers must perfect the post-checkout experience – cost management, intelligent order management, fulfillment flexibility and speed, anytime, anywhere service, customer-focused analytics and friction-free checkout. The time is now for retailers to nail down the basics so they can own the customer experience and reap the highest ROI.”
Product Selection Drives Purchasing Decisions on Amazon
Respondents to the survey report varying reasons for purchasing products on Amazon, but product selection and price rank highest.
- 38% of respondents cited product selection as the main reason to shop on Amazon, followed by prices (29%), and speed of delivery (13%).
- Younger shoppers (ages 18-29) are more likely to focus on speed of delivery (29% of overall sample) as a priority, while older and infrequent shoppers value product selection.
Product Reviews Remain Critical to Amazon
- Nearly half of Amazon shoppers surveyed say product reviews are the most influential source when deciding whether to purchase an item. This is more than three times the next-highest option, word of mouth.
To survive in today’s retail world – where Amazon alone was responsible for 30% of Cyber Weekend revenue – retailers must be vigilant about their future existence by putting sound, balanced eCommerce plans in place. Success largely depends on the customer experience, and there are plenty of profitable moves retailers can make to differentiate themselves. Download Radial’s “Field Guide: Creating the Right Retail Strategy for Successful eCommerce in the Age of Amazon” to find out how.
Radial’s study examines attitudes among customers who shop on Amazon.com. The findings are based on data collected by a third-party research firm from 1,000 respondents. To be included in the study, respondents had to state that they use Amazon.com to purchase something at least once a year. All of those who said they use Amazon.com “rarely or never” were terminated. The margin of error for a random sample of respondents is about +/- 3.1%. The margin of error for subgroups is higher.
Radial is the leader in omnichannel commerce technology and operations, enabling brands and retailers to profitably exceed retail customer expectations. Radial’s technical, powerful omnichannel solutions connect supply and demand through efficient fulfillment and transportation options, intelligent fraud detection, payments, and tax systems, and personalized customer care services.
Hundreds of retailers and brands confidently partner with Radial to simplify their post-click commerce and improve their customer experiences. Radial brings flexibility and scalability to their supply chains and optimizes how, when and where orders go from desire to delivery. Learn how we work with you at www.radial.com. read more
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